What is the definition of stamp duty?
Stamp duty, in basic terms, is a tax you pay when you purchase a property or piece of land above a certain value threshold, applying to properties over £250,000 (as of 2023), in England and Northern Ireland.
The amount of SDLT (stamp duty land tax) you pay can be deduced by using a stamp duty calculator.
What are the stamp duty rules on holiday homes?
Stamp duty rules for holiday homes mean a specific percentage of SDLT to pay. You are going to have to account for the payable stamp duty for your holiday home and this may change depending on the area.
Location means everything when it comes to stamp duty. Be sure to thoroughly research the area for your future holiday home as this may be something you need to consider beforehand.
How much stamp duty do you need to pay on a holiday home?
Firstly, how much stamp duty you need to pay on a holiday home depends on where you’re buying the property. Stamp duty in England and Northern Ireland has different rules compared to the likes of Scotland and Wales. Due to these factors, it is important to consider location when choosing a holiday home, as well as the payable percentage of potential stamp duty you may have to pay as a result.
Stamp duty rates in England
Stamp duty rates for holiday homes in England are typically an additional 3% above the standard threshold. The percentage of payable stamp duty increases with the value of the home you’re purchasing.
Property thresholds for additional properties
Percentage of payable stamp duty
Up to £250,000
£250,000 to £925,000
£925,001 to £1.5 million
Over £1.5 million
"With a new-build holiday home at Silverlake, you only pay stamp duty on the land purchase - no additional 3% stamp duty to pay."
Are there any exemptions from paying stamp duty?
Here are some instances in which you may be exempt from stamp duty:
- • If you purchase a freehold plot and instruct a build of a holiday home with a recommended builder such as the model at the Silverlake Estate in Dorset, you will only pay stamp duty on the land purchase. As you are self-building your own holiday home, this is not subject to the additional 3% holiday home stamp duty land tax surcharge.
- • If the property is valued at less than £40,000.
- • If you are made a property owner of an additional home through a divorce or legal separation.
- • All movable homes, including houseboats.
- • If the additional property was bequeathed to you in a will.
- • If you give your additional residence to a family member and they put the mortgage in their name, you can exempt them from paying stamp duty. Of course, if you help with the mortgage deposit and become a guarantor for them, then these are the correct steps to becoming exempt from paying stamp duty.
Purchase your perfect holiday home at Silverlake
Investing in holiday homes can offer huge potential rewards and a holiday home at Silverlake Estate is a worthwhile investment with many lifestyle and financial benefits.
Silverlake also offers a great option for those looking to get into holiday letting. Our sister company Habitat Escapes can take care of the marketing and management of your holiday let, so you can sit back and enjoy the regular income generated by your property.
Another benefit of buying at Silverlake? The huge stamp duty savings.
Stamp duty savings at Silverlake
If you buy a freehold plot of land and instruct a self-build holiday home, you only pay stamp duty on the land purchase, not the build contract. This is because stamp duty solely applies to the land purchase only and not the build itself. Therefore, Silverlake holiday homeowners benefit massively from being entirely exempt from paying the additional 3% holiday home surcharge.
In addition, all holiday homes, other than resales properties, at Silverlake are self-build, meaning VAT is zero-rated on the construction of the holiday home, saving thousands on the cost in total.
All properties at Silverlake, Dorset cannot be used as a primary residence.
Now you know how to navigate stamp duty on holiday homeownership, you can start getting ready for your purchase. From buy-to-let investment plans to a beloved home-from-home, whatever your holiday expectations, we’ll meet them and offer even more rewarding benefits.
Assured Rental Returns package
Through our limited availability Assured Rental Returns package, investing in your dream holiday home can now give you an even better return on investment.
In terms of stamp duty, with our package, you’ll automatically become exempt from the additional 3% holiday home stamp duty charge on the land purchase and build, meaning more great savings on a brand-new holiday home.
Get in touch today to begin your journey as a holiday homeowner at the awe-inspiring Silverlake Estate.